MDMA Exec: New Healthcare Reform Will Have “Zero” Impact on Device Industry

What a difference three weeks makes.

Four weeks ago, medical device manufacturers were nervously awaiting the outcome of healthcare reform efforts in the nation’s capital. Having lobbied vehemently (and seemingly unsuccessfully) against a potential $20 billion tax on their industry, device executives prepared themselves for the worst.

But the worst never happened. Instead, voters in Massachusetts elected a Republican to fill the seat left vacant by the death of Democratic Sen. Edward Kennedy. Such an unexpected turn of events (the Bay State’s voters have not elected a Republican senator in nearly 40 years) ended the Democrats’ filibuster-proof majority in the U.S. Senate and with it, their hopes for swift passage of a healthcare reform bill this winter.

Besides slowing the frenetic pace of healthcare reform on Capitol Hill, the election forced politicians to re-examine the legislation they were determined to pass—something the medical device industry had attempted (albeit unsuccessfully) for months. Executives that looked at the new year with trepidation and concern over the device tax now find themselves hopeful for the future. One industry leader even boldly predicted that the device sector will not be affected by any future healthcare reform bill passed by Congress.

“The healthcare reform bill the Senate put together is not very good,”Eamonn P. Hobbs, vice chairman of the Medical Device Manufacturers Association, a national trade group based in Washington, D.C., said at a recent industry event. “There could be a bipartisan compromise reached. Maybe. Democrats are still hesitant to bring any Republicans into the mix. I think we’ll see some sort of moderate healthcare reform that both Democrats and Republicans can take credit for. But the impact on our industry will be zero. Healthcare reform is not going to change anything we do unless lightning strikes.”

With lightning not likely to strike anytime soon, Hobbs is confident that the contentious tax on the industry died with the Democrats’ hopes for universal healthcare. “The most onerous reform for our industry is now fading into oblivion,” he said.

The tax’s demise, however, does not necessarily end the concerns of device industry executives. Other issues have surfaced that will most likely increase overhead costs for many device firms, Hobbs claimed.

“Like they say on the Ginsu knife commercial, ‘there’s more,’ ” Hobbs said. “There’s Medicare reform and comparative effectiveness research. And then there’s the National Medical Device Registry and the Physician Payment Sunshine Act. Our industry is going to have more overhead costs in the future. Now, if we want to provide good healthcare, how are we going to make up for the increase in overhead? We’re going to end up raising our prices.”